The OTC BB—A Source for Good Pennystocks

Good pennystocks are found primarily on the OTCBB (the over the counter bulletin board). Although the OTCBB is not a part of NASDAQ, the companies included on the list must be fully reporting. In other words, all of their Security Exchange Commission filings must be current.

The ones listed on the OTC BB are the good penny stocks, because we know more about them. The companies listed on the Pink Sheets (the other major source for quotes) may have provided little or no information.
 

Investment banks and their clients take part in these risky, but potentially profitable deals. Straight purchases and other deals can be made via computer or by telephone. When penny stocks are being bought or sold, it is often referred to as the Third Market. When an OTC future contract is involved, it is sometimes referred to as the Fourth Market.

Those are a couple of the terms you might see on internet forums. One of the most frustrating things about forums and message boards for beginners is that the experienced investors seem to be speaking in a different language. You almost need a glossary of terms in order to understand the tips that are being offered.

If you are looking for a Canadian list of penny stocks and you can’t find what you are looking for on the Pink Sheets or the OTCBB, you can try the Toronto Venture Exchange. Another source for low cost or low-cap investments is AIM, the Alternative Investment Market.

Although it is uncommon, some pennystocks are listed on the major stock exchanges.

Whether or not they are good choices depends on the company. At least you will know that a penny stock listed on NASDAQ has provided all of the information required by the SEC. Investing in such a company could pay off in the long run.

A broker might run a promotion for particular “in-house” securities. The cost per share may be lower than the quoted price, because the shares were acquired as part of a trade or for other reasons. While buying in at below market value can pay off, you could also be stuck with them.

Everything depends on how well the business does in the future. There are no crystal balls or fool-proof systems for finding good pennystocks. It takes patience and research to find them.